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Former Member, New York State Committee of the Independence Party (73rd AD - Eastside Manhattan) and Former Member, New York City Independence Party Organizations - Manhattan Executive Committee and County Committee, representing the 73rd AD.

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Friday, September 30, 2016

Donald Trump’s Charitable Foundation, which has been sustained for years by donors outside the Trump family, has never obtained the certification that New York requires before charities can solicit money from the public, according to the State Attorney General’s office.

Under the laws in New York, where the Donald J. Trump Foundation is based, any charity that solicits more than $25,000 a year from the public must obtain a special kind of registration beforehand. Charities as large as Trump’s must also submit to a rigorous annual audit that asks, among other things, whether the charity spent any money for the personal benefit of its officers.

If New York Attorney General Eric Schneiderman (D) finds that Trump’s Foundation raised money in violation of the law, he could order the charity to stop raising money immediately. With a Court’s permission, Schneiderman could also force Trump to return money that his foundation has already raised.

Schneiderman had previously launched an investigation of the Foundation in the wake of reports by The Washington Post that Trump used his charity’s money to make a political gift, to buy paintings of himself and to settle legal disputes involving his for-profit businesses.

Tax filings show that in each of the past 10 years for which there are records, the Trump Foundation raised more than $25,000 from outsiders. Tax records alone do not reveal whether the donations amounted to solicitations under New York law, but in several cases there is strong evidence that they did.

For instance, the Foundation has received more than $2.3 million from companies that owed money to Trump or one of his businesses, but that were instructed to pay the Foundation instead, according to people familiar with those transactions.

In the most obvious example of a public solicitation, the Trump Foundation set up a website early this year to collect small-dollar donations that it promised to pass along to veterans. In all, the website said, the Trump Foundation took in $1.67 million through that site.

But, as of this week, the Trump Foundation had not obtained the State registration required to ask for donations, according to a spokesman for Schneiderman.

Experts on charity law said they were surprised that Trump’s Foundation, given its connections to a wealthy man and his complex corporation, did not register to solicit funds.

“He’s a billionaire who acts like a thousandaire,” said James J. Fishman, a Professor at Pace University’s Law school in White Plains, N.Y. He said Trump’s Foundation seemed to have made errors, including the lack of proper registration, that were more common among very small family foundations. “You wouldn’t expect somebody who’s supposed to be sophisticated, and brags about his business prowess, would run his foundation like this,” Fishman said.

The Trump Foundation was established by Trump in 1987 to give away the proceeds of his book “The Art of the Deal.” Trump is still the Foundation’s President. For many years, Trump was the Foundation’s sole donor: He gave a total of $5.4 million between 1987 and 2006.

Under State law, the Foundation during that period was required to have only the ­least-demanding kind of certification, referred to as “EPTL,” because it is governed by the Estates, Powers and Trusts Law. Under that registration, the Trump Foundation filed annual reports with the Internal Revenue Service and the State. But the State did not require an independent audit to ensure that the charity was handling its funds properly. But starting in the early 2000s, Trump’s Foundation began to change. It began to take in donations from other people.

At first, it happened a little bit at a time. In 2004 an autograph seeker sent $25 to Trump Tower, along with a book he wanted Trump to sign. The book came back signed. The money was deposited in the Trump Foundation. Then, the gifts began to get larger.

In 2005, Trump’s wife, Melania, was named “Godmother” of a new ship launched by Norwegian Cruise Lines. As part of its agreement with Melania Trump, the cruise lines said, it gave $100,000 to the Trump Foundation. The Trump campaign has not responded to requests for comment on the gift.

In the meantime, Trump himself drastically reduced his gifts. After 2008, tax records show he stopped giving altogether. Since then, according to tax records, the Trump Foundation has received all of its incoming money, more than $4.3 million, from other donors.

Under State law, charities that solicit donations from others in New York must register under a different law, called “7A” for its article heading. In this 2014 paperwork, filed with New York State’s Attorney General, Donald Trump’s Charitable Foundation did not register as a “7A” charity.

In that law, the definitions of “solicit” and “in New York” are both broad. Solicit means “to directly or indirectly make a request for a contribution, whether express or implied, through any medium.” The requirement covers any solicitation that happened in New York or involved a donor who was in New York when somebody called them and asked.

“The only thing it wouldn’t cover is somebody giving money without being asked,” said Pamela Mann, a former Head of the New York State Charities Bureau, who is now in private practice at Carter Ledyard & Milburn. “The law says that soliciting from the public in New York, without being registered to do so, is an illegal act.”

The Trump Foundation has received more than $25,000 from people other than Trump in all of the past 10 years shown in tax records. In some cases, the donors have declined to comment, so it is not clear whether the donations were actually solicited and, if so, whether the solicitation happened in New York. Trump used $258,00 from his charity to settle legal problems.

But, in several cases, The Post’s reporting has indicated that the Trump Foundation or Trump himself did help bring in the money. In 2011, for instance, Trump was the star of a televised “roast” on Comedy Central in New York. He directed his $400,000 appearance fee to the Donald J. Trump Foundation, according to a Trump Campaign staffer. Between 2011 and 2014, the Trump Foundation also received nearly $1.9 million from a New York businessman named Richard Ebers, who sells high-end tickets and one-of-a-kind experiences to wealthy clients.

Two people familiar with those transactions told The Post that Ebers bought tickets and other goods and services from Trump, and was instructed, by Trump or someone at his company, to pay the Trump Foundation instead. Trump’s Campaign has neither confirmed nor denied The Post’s reporting about the nature of the donations from Ebers. Ebers has declined to comment.

Then, this year, Trump skipped a Republican Primary debate in Iowa and instead held a televised fundraiser for veterans’ causes. As part of that effort, he set up a website, donaldtrumpforvets.com, which took donations via credit card and sent them to the Donald J. Trump Foundation. “Over 1,670,000 raised online,” said the thank-you message from the Trump Foundation, after The Post made a $10 donation in March.

The most important consequence of not registering under the more rigorous “7A” level was that the Trump Foundation was not required by the State to submit to an annual audit by outside accountants. In such an audit, Charity-Law experts said, the accountants might have checked the Trump Foundation’s books, comparing its records with its outgoing checks, and asking whether the Foundation had engaged in any transactions that benefited Trump or his busi­nesses.

In recent years, The Post has reported, Trump’s foundation does appear to have violated tax laws in several instances. In 2013, it gave a donation to a political group supporting Florida Attorney General Pam Bondi (R), despite a ban on nonprofit groups making political gifts. The Trump Foundation then filed an incorrect tax filing, which omitted any mention of that gift, and said incorrectly that the money had gone to a charity in Kansas. Trump paid a $2,500 penalty tax for that political gift this year.

In two other instances, Trump’s Foundation has made payments which appeared to help settle legal disputes involving Trump’s for-profit businesses. In 2007, Trump’s foundation paid $100,000 to settle a lawsuit involving his Mar-a-Lago Club in Florida. And in 2012, the Foundation paid $158,000 to the charity of a New York man named Martin Greenberg on the day that Greenberg settled a lawsuit against one of Trump’s golf courses.

Those two cases are under investigation by Schneiderman. Just this week, his office requested that a Florida attorney provide a copy of the Foundation check that Trump had sent to settle the Mar-a-Lago case.

Trump’s son Eric has his own foundation, also headquartered in New York, which raises money from the public through an annual golf tournament. Unlike his father’s charity, however, the Eric Trump Foundation has registered to solicit funds in the State and files an annual audit report. The two Trump Foundations share an accountant, Donald Bender of the firm WeiserMazars. A spokeswoman for the firm declined to comment on Thursday.

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